For all project stakeholders, there has been a growing interest to see more collaboration and fewer conflicts in the design and construction process. As part of this interest, new methodologies have begun to emerge, including the Integrated Project Delivery (IPD) methodology.
In response to this, the Canadian Construction Documents Committee (CCDC) struck a special task team to create a Canadian contract for the use of the IPD methodology. The following describes some of the key principles and concepts being used in the new CCDC 30, as well as how the IPD project flows from this new CCDC 30 contract form.
How Does CCDC 30 Approach the IPD Method?Integrated Project Delivery (IPD) is a project delivery method that aligns the business interests of the IPD Team, consisting of the Owner, Consultant, Contractor, and any Other IPD Parties, through a single, multi-party contractual arrangement. The pricing structure is cost plus with a target price, with the profits of the design and construction team members identified and allocated to a Risk Pool that remains at risk subject to achievement of mutually agreed Project objectives.
It is the essence of IPD that members of the IPD Team work collaboratively to achieve Project objectives in an environment of mutual trust, respect, and transparent and cooperative communication. The IPD contract is designed to actively encourage these behaviors, including waivers of liability among the parties (subject to a few necessary exceptions). Each party remains engaged throughout the Project and commits the necessary resources to allow all other parties to meet or exceed their mutual commitments under the Contract and realize recovery of the Risk Pool.
A critical step in the IPD process is the establishment of a Project Management Team, or PMT, which includes representatives appointed by each party to the IPD Contract. The PMT is established at the outset of the relationship and provides management-level guidance for planning, design, and construction to meet the Project’s objectives.
In addition to managing the project throughout its progress, the PMT also develops benchmarks, metrics, and standards for progress evaluation. The PMT makes decisions that affect all aspects of the project, including cost and schedule, and provides all parties with enhanced control over risk. PMT decisions are made by unanimous agreement, and may only be modified by action or instruction from the Senior Management Team, or SMT.
IPD Phases Through CCDC 30
The IPD process involves several phases:
1) Validation Phase:
During the Validation Phase, the PMT validates the Project objectives and establishes the Base Target Cost, milestone schedule, and the profit/Risk Pool. This confirmation is set out in a lengthy and detailed Validation Report for approval by the Owner, and which confirms the business case for the Project. The Validation Report includes a Contract Tasks Matrix and staffing plan, as well as details concerning contingency, breakdown of Reimbursable Costs, insurance, and contract security, as well as other matters. Importantly, the Validation Report confirms the consensus of the parties that there is a reasonable probability the project can be completed successfully and meet the targets established by the PMT.
There are two possible outcomes at this stage:
- The Validation Report is approved by the Owner, at which time the Project proceeds to the next phase; or,
- The Validation Report is not approved by the Owner, at which time parties are released from the IPD Contract and the members of the Design/Construction Team receive reimbursement for their costs expended to that point, without profit.
2) Design/Procurement Phase:
Following the completion of the Validation Phase and the approval of the Validation Report, the IPD Project moves to the Design/Procurement Phase, during which the PMT coordinates the design services of the Project.
In addition to design services, the PMT also undertakes ongoing updates of contract tasks, the early procurement of systems, materials or equipment, and the continuing work of organizing Project Implementation Teams (PITs). PITs are cross-functional, interdisciplinary teams charged with the responsibility of delivering specific aspects of the Work in the most efficient manner possible.
With the assistance of the PITs, the PMT establishes the detailed schedule for the Project based on the design requirements and milestone schedule established in the Validation Report.
During this stage, the Project’s Final Target Cost is established. The Final Target Cost includes all cost elements, including Risk Pool, Contingency, Reimbursable Costs, and should the Owner select, any Added Value Incentive Items that can be selected without exceeding the Base Target Cost previously established.
3) Construction Phase:
In the Construction Phase, the PMT oversees the construction of the Project. This phase involves ongoing and continuous collaboration, with a view to problem-solving and seeking opportunities for innovation, all in real-time. As with other phases of the project, the use of Lean construction principles and collaborative practices are considerable advantages for the successful delivery of the project.
4) Warranty Phase:
Upon the completion of construction, the Owner and Design/Construction team work collaboratively to correct any work not in accordance with the Contract and construction documents. Thirty days prior to the expiration of the Warranty Phase, the PMT organizes a final review of the Project including all project costs and determines the final distribution of the Risk Pool.